IMF upgrades its forecast for China’s economy, but says reforms are needed to support growth

By ELAINE KURTENBACH
AP Business Writer

The International Monetary Fund has upgraded its forecast for China’s economy, while warning that reforms are needed to sustain growth. The IMF said the world’s second-largest economy will likely grow at a 5% annual rate this year, based on its growth in the first quarter and recent moves to support the property sector. But it warned in a report that attaining sustained, “high-quality” growth requires building stronger social safety nets to enable Chinese consumers to spend more. It also said Beijing should scale back subsidies and other “distortive” policies that support manufacturing at the expense of other industries such as services.